European digital sovereignty has once again hit the headlines. But, what is it, why is it important, and why is it seeing a renewed interest? Let’s take a look.
What is Digital Sovereignty?
In this day and age, most businesses operate using a huge variety of different technologies and digital tools. These aren’t just the ones that provide their goods or services. Take something like online casinos. For example, Paddy slot games in the UK, like Express Hold and Win, Bullion Blitz, and Big Bass Splash, require a range of technologies to operate, such as HTML5, random number generators (RNGs), sound, and animation. They are also hosted on a cloud-based platform or downloadable application.
Then, there are the technologies that ensure compliance with regulations, such as in-built responsible gambling tools, verification software, and payment protection encryptions like Secure Sockets Layer (SSL) and Transport Layer Security (TLS). Any personal data is also stored and protected by biometrics, firewalls, intrusion detection systems, traffic analysis solutions, and automated scanning tools. This goes to show just how much technology is required both upfront and behind the scenes for businesses to provide goods and services in a compliant and efficient manner.
Despite such a variety in technologies being employed – both software and hardware alike – businesses often have little choice in the technology market. In Europe, particularly, even fewer of these choices are homegrown. With this in mind, digital sovereignty aims to provide businesses with control over the data, hardware, and software that they rely on (or even create). This refers to everything from the infrastructure to the standards, rules, and design of the code, and the ownership, flows, and usage of the data layer.
Why is Digital Sovereignty Seeing Renewed Emphasis in Europe?
The introduction of the importance of digital sovereignty first began in March 2021, when leaders of four European countries (Estonia, Finland, Denmark, and Germany) urged the European Commission to accelerate Europe’s technological position towards a digital single market. The full letter is still available to read online, published by ERR News in Estonia. Since this time, the EU has established three key acts to regulate the digital economy and emerging technologies in Europe – the Digital Markets Act (DMA), the Artificial Intelligence (AI) Act, and the Digital Services Act (DSA).
Despite the DMA, AI, and DSA Acts being generally well-received, the concept of digital sovereignty requires more than just regulation. Indeed, it needs to consider encouraging new businesses and innovation in European countries. The aim is that this would create more competition, reducing the power and control that large technology companies in the US and China, particularly, have over the data and market dominance they hold.
For potentially obvious reasons, these concerns have become even more relevant in the current climate. In 2025, the prospect of digital sovereignty for Europe is being talked about more and more. The key question here, as greatly summarized by Raconteur, is whether European businesses could function without US tech. Indeed, can European firms effectively decouple from the American technology they rely on?
Potential Benefits of European Digital Sovereignty
This renewed emphasis on digital sovereignty has been encouraged by cloud, telecommunications, and defence firms in Europe, which is backed by a set of proposals penned by leading academics, researchers, and think tanks, known as the EuroStack initiative. The primary aim of this push is to stop European firms from having to rely on US giants like Google, Microsoft, and other big names from Silicon Valley, particularly when it comes to SaaS platforms. In doing so, this will mean that the digital infrastructure and applications that are used in Europe will only be subject to EU laws and regulations, rather than those in the US.
In turn, this may potentially reduce the risk of security and economic concerns, which could be limiting the growth of European enterprises. Similarly, the reduction of reliance on foreign technologies can allow for more economic independence. As such, more digital and economic independence could increase the competitiveness of these European economies.
As you can see, digital sovereignty is becoming increasingly important in Europe in 2025, which has caused it to come to the forefront once again. Whilst we are seeing more calls for this to be developed as soon as possible, this will certainly not happen overnight. Overall, we will have to wait and see what the future holds and how Europe can begin to encourage more entrepreneurship and innovation, especially in the US-dominated SaaS platform sector.
